Zambia’s borrowing costs fell sharply at its first local currency bond auction since President Hakainde Hichilema secured a second term, as strong investor demand signalled growing confidence in the country’s political and economic outlook.
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Bids for the multi tenor auction exceeded the 6.3 billion kwacha ($332 million) on offer by 37 percent, according to Bloomberg reports, marking a sharp turnaround from the previous sale in June, which was undersubscribed.
The seven year bond attracted the strongest demand, with its yield falling to 14.79 percent, 101 basis points lower than at the June auction. The decline in yields means investors were willing to accept lower returns to hold Zambia’s debt, reflecting improved confidence in the country’s prospects.
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